QUICK SUMMARY
The short answer: Alabama law does not require a termite letter to buy a house, but your lender almost certainly will. VA loans require a wood-destroying insect inspection on every Alabama purchase, and most FHA and conventional lenders in the state expect one too. The document is officially called the Alabama Wood Infestation Report. A licensed pest control company inspects the visible, accessible parts of the home for termites, wood-boring beetles and wood-decay fungus, then reports what it saw. It usually costs under $150, the seller often pays for it in Alabama, and a report that is “not clear” is common and fixable.
Alabama sits in one of the heaviest termite zones in the country. Subterranean termites are active in every county, and the warm, wet climate keeps them busy most of the year. That is why the termite letter shows up in nearly every Alabama closing, right alongside the appraisal and the home inspection. This guide explains what it is, who orders it, what the results mean and what to do about the termite bond. Last updated: September 2026.
Key takeaways
1. “Termite letter,” “WDI report,” “WDO report” and “Wood Infestation Report” all mean the same document in Alabama.
2. It is a snapshot of what was visible on inspection day. It is not a warranty and it is not the same as a termite bond.
3. Evidence of a previous treatment is normal in Alabama and is not a red flag by itself.
4. If the seller has a termite bond, ask for it to be transferred to you at closing, and ask for the treatment graph and any state waiver form that goes with it.
5. Because Alabama is a caveat emptor state, the termite letter is one of your few independent checks on the home.
What is an Alabama Wood Infestation Report?
It is a two-part form filled out by a pest control company that holds a permit from the Alabama Department of Agriculture and Industries. The inspector walks the accessible areas of the home, including the crawl space or basement, the exterior foundation, the garage and the attic where possible, and records:
Visible evidence of active infestation. Live termites, fresh mud tubes, live wood-boring beetles.
Visible evidence of previous infestation. Old tubes, damaged wood, exit holes.
Evidence of previous treatment. Drill holes in the slab or foundation, bait stations around the perimeter.
Conditions that invite trouble. Wood touching soil, moisture or fungus in the crawl space, poor clearance under the floor joists.
Areas that could not be inspected. Finished basements, blocked crawl-space access, dense storage.
Two things it does not do. It does not open walls or move insulation, so hidden damage can be missed. And it does not guarantee the home’s condition tomorrow. For that you need a termite bond, which we cover below.
Is a termite inspection required to buy a house in Alabama?
There is no state law that requires one. The requirement comes from the loan.
VA loans: required. The Department of Veterans Affairs lists Alabama among the states where a wood-destroying insect inspection is required on every purchase. Since June 2022, VA buyers are allowed to pay for it themselves, which was not true before. Our VA home buyer guide covers the rest of the VA process.
FHA loans: usually. FHA formally requires the inspection only when the appraiser notes evidence of infestation or when local custom calls for it. In Alabama, local custom calls for it, so most FHA lenders here ask for a clear report.
Conventional loans: lender’s choice, and most say yes. Fannie Mae and Freddie Mac do not require it, but the majority of Alabama lenders and closing attorneys expect one in the file.
Cash buyers: optional, and worth it. For the price of a nice dinner you get an independent look at the one problem that can quietly cost tens of thousands of dollars.
Most lenders want the report dated within about 30 days of closing, so it is normally ordered after the inspection period, not at the start.
Buying your first home in Alabama? Our Complete Guide for First-Time Home Buyers walks through every step, or call 205-292-2108 (West Alabama) or 205-292-7142 (Birmingham).
Who pays for the termite letter in Alabama, and what does it cost?
By long-standing custom in Alabama, the seller usually provides the termite letter, and the standard purchase agreements used in West Alabama and the Birmingham area have a place to spell out who pays. It is negotiable. In a competitive offer, a buyer sometimes agrees to cover it. On a VA loan the buyer may pay since 2022, and on any loan the buyer can always order their own if they want a second opinion.
Cost is modest: most companies in Tuscaloosa, Northport and the Birmingham suburbs charge roughly $75 to $150 for a report on a typical single-family home. If the seller already has a termite bond with a company, that company often issues the letter for a reduced fee, or at no charge, as part of the bond.
For sellers, this is one of the smaller line items on the way to closing. Our cost to sell a house in Alabama article shows where it fits with the rest.
What happens if the termite letter is not clear?
First, do not panic. In Alabama a report that shows previous treatment or old damage is routine. Many homes built before the 2000s have been treated at least once. What matters is whether there is active infestation or untreated structural damage.
Active termites found. The usual fix is a treatment by a licensed company, paid by the seller, with a new report or treatment certificate delivered before closing. Lenders generally accept this.
Damage found. The pest company will note it but will not tell you whether it is structural. Have a contractor or structural engineer look, get a written repair estimate, and negotiate a repair, a credit or a price change. The lender may require the repair to be done before closing if it affects the home’s soundness.
Moisture or fungus in the crawl space. Very common in older neighborhoods with pier-and-beam homes. Fixes range from a vapor barrier and better drainage to full encapsulation. Get a quote before you decide.
Areas not inspected. If a big part of the house could not be seen, ask the seller to clear access and have the inspector return.
If your contract has an inspection contingency and the termite letter turns up something serious that the seller will not address, you can usually walk away with your earnest money intact, as long as you act within the contract deadlines.
What is a termite bond, and should I take over the seller’s?
A termite bond is a service contract with a pest control company. In exchange for an initial treatment and an annual renewal fee, the company inspects the home every year and comes back to treat if termites return. There are two kinds, and the difference matters:
Retreatment-only bond. The company will re-treat the home if termites come back. You pay for any damage repairs yourself. This is the most common type sold today because it is cheaper.
Repair bond (retreat and repair). The company re-treats and pays to repair new termite damage, up to a limit written in the contract. It costs more, and fewer companies offer it than they did 20 years ago, but it is worth asking for on an older crawl-space home.
Alabama regulates these contracts through the Department of Agriculture and Industries. Among other things, the initial term must be at least 12 months with the renewal fee stated up front. If the company could not treat some part of the house to the state’s minimum standard, it must have completed an Official State of Alabama Waiver Form with the owner, and under state rule that waiver has to be handed to any later owner when the bond is transferred. Ask for it. It tells you exactly which part of the house was not fully treated and why.
Our advice: if the seller has an active bond, take it over. Transfer fees are usually small, the treatment history comes with it, and it is far cheaper than starting a new bond with a fresh treatment. Have the transfer form signed at or before closing, and put the annual renewal on your calendar. A bond that lapses can be expensive to reinstate because the company may require a new full treatment.
What about new construction?
Alabama’s building code requires termite protection on new homes, typically a soil treatment before the slab is poured, a borate treatment of the framing, or a bait system. Most builders hand the buyer a one-year termite bond at closing. Confirm which company holds it and what the renewal costs, because year two is on you. Our new construction guide has a full closing checklist for builder homes.
A local perspective from The Williams Group
The Williams Group at Keller Williams Realty closes homes across West Alabama and the Greater Birmingham suburbs, and the termite letter is part of nearly every file. A few patterns we see over and over:
Crawl spaces are where the findings are. Pier-and-beam homes in older Tuscaloosa neighborhoods like Forest Lake, Alberta and the historic district, in downtown Northport, and in Birmingham-area neighborhoods like Homewood’s Edgewood and Hoover’s Bluff Park are wonderful houses, but their crawl spaces need airflow, drainage and clearance. Most “not clear” letters we see on these homes are about moisture and fungus, not live termites, and most are fixed for a few hundred to a few thousand dollars.
Lake and river properties add docks and decks. On Lake Tuscaloosa, Lake Nicol and the Black Warrior, ask the inspector to look at boathouses and deck framing too. They are not always covered by a standard report.
Sellers: get ahead of it. If you have a bond, have your company issue the letter early and fix anything it flags before the buyer’s inspector shows up. A clean, current termite letter in the listing file removes one more reason for a buyer to hesitate. It is a small step, and we recommend it on every listing we take.
Selling soon? A free home valuation from The Williams Group comes with a pre-listing checklist, termite letter included. Call 205-292-2108 or 205-292-7142.
Frequently asked questions
How much does a termite letter cost in Alabama?
Typically $75 to $150 for a single-family home, sometimes less if the seller’s bond company issues it. Large homes, homes with multiple outbuildings and rush orders cost more.
How long is a termite letter good for?
The report itself does not expire, but most lenders want one dated within about 30 days of closing. If a closing is delayed past that window, the pest company can usually update the report for a small fee.
Is a termite bond the same as a termite letter?
No. The letter is a one-time inspection report used for the sale. The bond is an ongoing service contract that includes annual inspections and re-treatment if termites return. A home can have a bond and still need a fresh letter for the lender.
Does an Alabama seller have to disclose termite damage?
Alabama is a caveat emptor state, so sellers generally do not have to volunteer defects, but they cannot lie when asked directly and must disclose known problems that affect health or safety. Ask in writing about termite history, treatments and bonds, and rely on the Wood Infestation Report as your independent check.
Can I use the home inspector’s termite findings instead of a separate letter?
Usually not. Lenders want the official Alabama Wood Infestation Report from a company permitted by the Alabama Department of Agriculture and Industries. Some home inspection companies hold that permit and can issue both; many do not.
Sources
Alabama Department of Agriculture and Industries, Pesticide Management Division, Official State of Alabama Waiver Form and Rule 80-10-9-.16. U.S. Department of Veterans Affairs, wood-destroying insect inspection requirements by state and Circular 26-22-10 (buyer may pay, effective June 15, 2022). Alabama Real Estate Commission, buyer and seller guidance on caveat emptor. Cost ranges reflect quotes from Alabama pest control companies and may vary.
Questions about buying or selling in Alabama?
From the first showing to the termite letter to closing day, The Williams Group will walk you through every step in plain English.
West Alabama 205-292-2108Birmingham 205-292-7142Get a Free Home Valuation
Follow The Williams Group
Daily market updates, new listings, open houses and life around West Alabama & Greater Birmingham:
FacebookInstagramTikTokLinkedInYouTube
See why neighbors trust us on our reviews page · West Alabama 205-292-2108 · Greater Birmingham 205-292-7142